Growth: Past, present, and future

So, wealth management is just one part of the finance sector, and professionals in this industry can generally be said to provide investment advice and financial advisory services that are tailored towards wealthy individuals. And now I know that's a relative term and we'll get into more specifics later. But to put it simplistically, individuals will discuss their financial circumstances and goals with their wealth managers, financial advisors who then work with them to make tailored financial plans and wealth management solutions that address a broad range of services that cover an entire financial life. So portfolio management, succession planning, estate planning, and more that we'll talk about further in this course a bit later on. But right now, what we're trying to gauge is how big is this industry? Where's it been? And where's it going? So to give ourselves a good broad strokes landscape and and understanding of this industry, let's look in the rear view mirror first. So picture this, it's 2007, 2008, and we have what is now known as the global financial crisis, and it has a huge, massive impact on the wealth management industry. Every part of global banking was impacted. So every industry within the finance sector, and finance professionals generally were under a lot more scrutiny, and finance generally had a lot more regulation than ever before. Now on the consumer side of things, the U.S. Federal Reserve estimated that U.S. households lost approximately 20% of their wealth between 2007 and 2009. And this, of course, impacted the wealth management industry significantly. And statistical trends have always been that the number of high-net-worth individuals worldwide by region has always been led by North America, followed by Asia-Pacific, and then Europe. And it took years for the dip in wealth management revenues to recover from this global financial crisis and the impact that it had on wealth. But by around 2015 or so, things started to look a lot better for this industry and things started to improve for everyone generally. And now the growth trajectory of the industry today is in its best place that it's been in in over a decade. Today the wealth management industry is facing a very different type of headwind. It's no longer the global financial crisis, but instead it's strong and steady revenues and profitability that we've seen for the last couple of years are now under threat from a key group of different factors. So growing competition, both from new entrants, as well as technological innovation, as well as established firms expanding their practices and absorbing these new technologies. Also a extension on that is low-cost, do-it-yourself investing solutions provided by new software and service companies that are up and coming, or that have already up and came. Now, increased regulation, which is a common theme that continues to grow, and last but not least, something that works out for us, which is a talent shortage. So these are the headwinds that the present and future holds, and for all of you taking this course right now, it's encouraging to know that the U.S. Bureau of Labor Statistics projects that, from 2022 to 2032, employment of financial advisors is projected to grow 13% during that time period from 2022 to 2032, and it's much faster than the average for all occupations. Now juxtapose that to the growth of the industry at the firm level, And let's focus on one of the largest, most successful wealth management firms in the world, which is J.P. Morgan. And while I've pulled that statistical example as a sample from the U.S., it's also important to consider that this is a trend that's being seen globally as well in the U.K., Europe, as well as Asia Pacific.